Notes to Consolidated Financial Statements

NOTE 20

COMMITMENTS AND CONTINGENCIES

Several state and federal regulatory proceedings may require our
telephone operations to pay penalties or to refund to customers a
portion of the revenues collected in the current and prior periods.
There are also various legal actions pending to which we are a party and
claims which, if asserted, may lead to other legal actions. We have
established reserves for specific liabilities in connection with
regulatory and legal actions, including environmental matters that we
currently deem to be probable and estimable. We do not expect that the
ultimate resolution of pending regulatory and legal matters in future
periods, including the Hicksville matter described below, will have a
material effect on our financial condition, but it could have a material
effect on our results of operations for a given reporting period.

During 2003, under a government-approved plan, remediation commenced
at the site of a former Sylvania facility in Hicksville, New York that
processed nuclear fuel rods in the 1950s and 1960s. Remediation beyond
original expectations proved to be necessary and a reassessment of the
anticipated remediation costs was conducted. A reassessment of costs
related to remediation efforts at several other former facilities was
also undertaken. In September 2005, the Army Corps of Engineers (ACE)
accepted the Hicksville site into the Formerly Utilized Sites Remedial
Action Program. This may result in the ACE performing some or all of the
remediation effort for the Hicksville site with a corresponding decrease
in costs to Verizon. To the extent that the ACE assumes responsibility
for remedial work at the Hicksville site, an adjustment to a reserve
previously established for the remediation may be necessary. Adjustments
to the reserve may also be necessary based upon actual conditions
discovered during the remediation at any of the sites requiring
remediation.

In connection with the execution of agreements for the sales of
businesses and investments, Verizon ordinarily provides representations
and warranties to the purchasers pertaining to a variety of nonfinancial
matters, such as ownership of the securities being sold, as well as
indemnity from certain financial losses.

Subsequent to the sale of Verizon Information Services Canada in
2004, we continue to provide a guarantee to publish directories, which
was issued when the directory business was purchased in 2001 and had a
30-year term (before extensions). The preexisting guarantee continues,
without modification, despite the subsequent sale of Verizon Information
Services Canada and the spin-off of our domestic print and Internet
yellow pages directories business. The possible financial impact of the
guarantee, which is not expected to be adverse, cannot be reasonably
estimated since a variety of the potential outcomes available under the
guarantee result in costs and revenues or benefits that may offset each
other. In addition, performance under the guarantee is not likely.

As of December 31, 2008, letters of credit totaling approximately
$200 million were executed in the normal course of business, which
support several financing arrangements and payment obligations to third
parties.

We have several commitments primarily to purchase network services,
equipment and software from a variety of suppliers totaling $737
million. Of this total amount, $435 million, $162 million, $75 million,
$29 million, $26 million and $10 million are expected to be purchased in
2009, 2010, 2011, 2012, 2013 and thereafter, respectively.

* This is an interactive electronic version of Verizon’s 2008 Annual Report to Shareowners, and it is intended to be complete and accurate.
The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is
available in PDF format on this website.